Marks & Spencer Group (LON:MKS) is pulling out of China’s high street, The Telegraph has reported. The move comes with the blue-chip retailer currently undergoing restructuring under chief executive Steve Rowe who has been trying to turn around the group’s underperforming clothing division.
Marks & Spencer’s share price has fallen into negative territory in today’s session, pressured by uncertainty surrounding the upcoming Brexit negotiations. As of 13:40 GMT, the shares were changing hands 2.43 percent in the red at 329.60p, underperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.15 percent worse off at 7,355.74 points. The group’s shares have lost nearly a fifth of their value over the past year, and are down by just under six percent in the year-to-date.
The Telegraph reported today that Marks & Spencer was pulling out of Chinese high street this month, barely a year after opening its tenth store in the country. Adam Colton, Managing Director of Greater China, pointed to ‘low brand awareness’ as a key reason for the exit.
The newspaper, however, quoted Chinese observers as noting that M&S has been accused of opening stores in odd places – either in second tier cities, or near to well-established, cheaper foreign rivals. Jim James, managing director of Morgan Cars China, meanwhile noted that despite the popularity of British brands, companies seeking a slice of the market still have their work cut out.
“The Chinese love British goods, but Chinese consumers are discerning,” he told the Telegraph “Being British gives brands a head start in certain categories, but it does not guarantee winning the race.”
The 24 analysts offering 12-month price targets for Marks & Spencer for the Financial Times have a median target of 340.00p, with a high estimate of 500.00p and a low estimate of 250.00p. As of March 13, 2017, the consensus forecast amongst 27 polled investment analysts covering the blue-chip retailer advises investors to hold their position in the company.